John T. Reed's review of Rich Dad, Poor Dad! - Posted by John

Re: John T. Reed’s review of Rich Dad, Poor Dad! - Posted by JPiper

Posted by JPiper on January 17, 2000 at 21:33:59:

Hey David:

Did you win your corporations sales contest yet, and that first prize…the Rolex?

JPiper

Re: John T. Reed’s review of Rich Dad, Poor Dad! - Posted by Rob FL

Posted by Rob FL on January 18, 2000 at 12:49:52:

I think you just hit the nail on the head. The point is, not that every primary residence is a liability and not that every primary residence is an asset, but that luxury primary residences usually are a liability (Especially if this luxury becomes an alligator because of high payments or costly repairs), and on the other hand most non-luxury houses are not alligators and will in fact cost you less in housing expenses over the span of a lifetime.

As far as taxes go, rent is SPEND $1.00 to get ZERO from the government (I will take $.30 over ZERO any day). Appreciation on primary residences is slower, but there is a $500,000 exemption on capital gains. So there is a tax benefit.

Again, the bottom line is that EVERYONE must pay to have some form of shelter, so the shelter should have an overall cost that is as low as possible that still meets your needs (not your wants).

True - Posted by Chris (FL)

Posted by Chris (FL) on January 18, 2000 at 10:23:48:

That was R.K.'s point. Don’t go out and buy a home that’s 3000 square feet to big for your needs because … well … “it’s an investment”.

Warren Buffet still lives in the house he bought 35 years ago , I do believe.

Re: A Property that has negative cash flow is a liability. - Posted by Rob FL

Posted by Rob FL on January 18, 2000 at 08:46:46:

R.K. seems to think that all assets must produce income. I disagree. There is an accounting term of “income producing assets.” If that was the case then every business in America would probably have 5% assets and 95% liabilites on their balance sheet. I guess all these educational courses, books, audio cassettes, etc. are all liabilities because I spent money and they don’t produce any income in and of themselves.

I won’t debate this subject any further except to say that everyone except homeless people in America must have some type of permanent shelter. That being a fact, which sends more money to your bottom line? Owning a home for 50 years or renting a home for 50 years? Think real hard about it.

Re: John T. Reed’s review of Rich Dad, Poor Dad! - Posted by David Alexander

Posted by David Alexander on January 17, 2000 at 21:53:00:

This is going to be saved for one of those late night discussions in Atlanta, after you had a few drinks, Phil has bought you a few, and after I buy you a few more, and then, “Only Then” maybe I’ll have a chance in “H*ll” of winning a debate with you. But I will be ready nonetheless.

David Alexander

READ - READ -READ - Posted by Glenn OH

Posted by Glenn OH on January 19, 2000 at 09:32:51:

I agree “I will take $.30 over ZERO any day”. Unfortunately it is really -$.30 vs. ZERO. You have to earn $1.39 to spend that $1 on rent (tax @ 28% - $1.39x.72=$1.00). You only have to earn $1.00 to pay $1.00 on a mortgage. The tax deduction isn’t a government giveaway program, it is a ‘taxpayer gets to keep what they earn’ program. I think 90% of taxpayers see deductions as cash into their pockets rather than the reality of ‘no cash out’, and then justify their spendthrift attitudes as “its deductible”. Especially with the prevalence of home equity lines of credit, all the little ‘wants’ we have can now be made deductible! Just what the mortgage companies want us to think! I think the other 10% have an advantage by understanding the way the deductions really work. I hope all of us that read CREOnline will learn this understanding.
Sorry if this sounds to much like I’m lecturing - I used to be a teacher.